July 31, 2009

Record Companies, RIAA Prevail in Copyright Trial

By Sheri Qualters

BOSTON - A jury in a high-profile federal copyright infringement trial here ordered a Boston University graduate student to pay $675,000 to several record companies for illegally downloading and distributing 30 of their songs.

Joel Tenenbaum appeared stoic as the jury announced that each of the 30 counts of willful infringement would cost him $22,500. The tab— while steep — is far less than the $4.5 million that the companies could have received had the jury imposed the maximum per-song damages allowed under law. Copyright law allows for damages of $750 to $30,000 for each copyright infringement and up to $150,000 for each willful infringement.

Tenenbaum said he was happy the verdict wasn’t in the millions and “not displeased with the jury given how the trial went.”

Tenenbaum’s attorney, Harvard Law School professor Charles Nesson, whose case has faced several setbacks in recent weeks, closed his eyes just before the jury read the verdict. Nesson said he expects to appeal the judgment – and contends that U.S. District Judge Nancy Gertner’s ruling that Tenenbaum couldn't cite fair use, or the legal use of copyrighted works under certain circumstances, is “vulnerable.” That ruling was issued the morning jury selection began.

“It’s not a fair verdict because the jury never got to consider the fairness issue,” Nesson said. “We had a pretty darn good argument.”

Nesson himself tangled with plaintiffs lawyers after the jury left the room Friday. The lawyers — Matthew Oppenheim of the Oppenheim Group in Potomac, Md. and Timothy Reynolds of Denver-based Holme Roberts & Owen — sought sanctions against Nesson for posting deposition excerpts on the Internet.

Nesson said the plaintiffs’ side offered to drop the sanctions motion if he destroyed the materials at issue. But he said he wanted to use at least some of the materials for teaching purposes. Oppenheim told Gertner that he and Reynolds didn’t want to be a part of Nesson’s classroom materials or to be a party to any Internet distribution of the information. Gertner asked Nesson to send her a letter by Aug. 10 outlining his plans for the material.

Throughout closing arguments on Friday, Nesson, tried to convince the jury to keep damages low. He argued that Tenenbaum was “addicted” to downloading music, and that the college student was only taking advantage of available technology. He was not, Nesson said, attempting to deprive the record companies of profits. Declining profits at record companies, Nesson said, was caused by their inability to keep up with technological change.

“Progress happens, it’s not Joel who is responsible,” Nesson said. “There’s no reason for [the industry] to put their calamity off on kids.”

Near the end of three hours of testimony on July 30, Tenenbaum admitted liability for downloading and distributing the songs at issue in the case. After Tenenbaum’s testimony, Gertner ruled that the jury had only to decide whether infringement was willful and how much Tenenbaum should pay in damages.

In a statement for the plaintiffs’ side, the RIAA said the organization “appreciates that Mr. Tenenbaum finally acknowledged that artists and music companies deserve to be paid for their work…We only wish he had done so sooner rather than lie about his illegal behavior.”

The District of Massachusetts case, Capitol Records Inc. v. Alaujan, is one of many that record companies and the Recording Industry Association of America have filed against college students for making illegal Internet music downloads. (The companies involved in the case at this point are: Arista Records LLC, Sony BMG Music Entertainment, Warner Bros. Records Inc., and UMG Recordings Inc.)

Most have settled, but Vivendi-owned The Universal Music Group took home a $1.92 million verdict in June when a Minnesota jury decided Jammie Thomas-Rasset should pay $80,000 for each of 24 songs she posted on a Web site for others to download.

The final day of trial focused on damages after an earlier order by Gertner ruling for the plaintiffs on the issues of copyright ownership and liability.

On Friday, Nesson called ethnomusicologist Wayne Marshall, a Mellon Fellow at the Massachusetts Institute of Technology, as his sole witness to demonstrate the current ease of buying an MP3, or digital song, from Amazon.com for 99 cents.

Gertner directed Nesson to do a trial run of Marshall’s testimony without the jury because the plaintiff’s team expressed concerns about the late addition of Marshall as a witness.

Later, during his closing argument, Nesson said Tenenbaum “didn’t have the option of getting an MP3 song in a sleek and easy way” as late as August 2004, when the record companies captured images of 800 songs Tenenbaum infringed.

Gertner sustained a few of the numerous objections the plaintiffs lobbed at Nesson during his closing, including his advice that the jury had “the power not to fill in the boxes” on the jury form, which asks jurors to list damages for copyright infringement of each of the 30 songs.

Nesson said the form looks like “a kind of school exam,” but he said, “justice is in the bottom line, the total number.”

“If that bottom line is just and appropriate, then you’re doing your job,” Nesson said.
Nesson also said that because Tenenbaum was distributing music downloaded from others as opposed to posting the first copy, he wasn’t responsible for the companies’ lost revenue. “[As for the] value of the copyright to Joel, I submit it’s 99 cents [for each song],” Nesson said. “That’s what he has to pay for it if he purchases it from Amazon.”

Reynolds also disputed Nesson’s arguments that Tenenbaum’s sharing simply passed along other people’s downloads. He said Tenenbaum downloaded 600 to 5,000 songs onto a Goucher College shared network while he was an undergraduate and before the Baltimore-based school shut down online song sharing.

He also noted that Tenenbaum continued making illegal downloads for at least a year-and-a-half after the record companies notified him he’d been caught. Illegal downloading has caused lost sales, significant layoffs and harmed the record companies’ ability to develop new products, he said.